Professional Documents
Culture Documents
Understanding The Appeal of The Taliban in Pakistan
Understanding The Appeal of The Taliban in Pakistan
Volume 3
Number 3 Fall 2010
Article 1
This article briefly explores the economics of the "Talibanization" of Pakistan within descriptive and
contextual paradigms, while attempting to find a best solution to counter rising militancy in the
context of realities facing the population on the ground. One such solution is the National Pakistani
Counter Terrorism and Extremism Strategy (NACTES), designed to curb Taliban financing in
Pakistan. The strategy is being drafted by National Counter Terrorism Authority (NACTA), the
nascent homeland security coordination body set up by the state as the primary public organ entrusted
with counterterrorism, counter-extremism, and de-radicalization efforts of the state.
Introduction
The past six years, since 2004, have witnessed a significant rise in incidents of terrorism in Pakistan. The writ of the state has been directly challenged by the rise of many extremist, militant groups, who have
transmigrated from Pakistan's tribal areas. These groups have assumed
control of large areas in Pakistan, like Swat in Khyber-Pakhtoonkhwa,
still popularly known as the North West Frontier Province (NWFP). The
momentum of this extremism is marked by an unprecedented alacrity,
organizational capability, and impunity to engage the state militarily.
Scholarship has not kept pace with terrorism, and is in a nascent stage in
Pakistan, with little understanding and research among researchers, analysts, and policymakers into the drivers of extremism. Among the possible
factors giving rise to terrorism in Pakistan, poverty and poor social indicators figure prominently.
This article briefly explores the economics of the "Talibanization" of Pakistan within descriptive and contextual paradigms, while attempting to
find a best solution to counter rising militancy in the context of realities
facing the population on the ground. One such solution is the National
Pakistani Counter Terrorism and Extremism Strategy (NACTES),
designed to curb Taliban financing in Pakistan. The strategy is being
drafted by National Counter Terrorism Authority (NACTA), the nascent
homeland security coordination body set up by the state as the primary
public organ entrusted with counterterrorism, counter-extremism, and
de-radicalization efforts of the state.
There are several defining characteristics that need to be explored to put
this extremist movement in perspective. First, the Taliban have attempted
to win the sympathies of target populations by exploiting the lacunae in
distributive social justice, thereby bypassing the framework of local
governance. The result has been improvised local economic "pumps"
catering to the masses, particularly the landless poor. Second, they have
utilized an ingenious blend of natural resources that supplements or
perhaps even equals outside donor funding; this implies that they have
adroitly taken over whatever resources they could appropriate in areas
under their control. Third, they have managed to augment their income
1
with funds generated from organized criminal activities. Last, but not
least, the informal money exchange systems in Pakistan and the various
Islamist trusts are quite active in Pakistan, notwithstanding stateenforced bans and crackdowns.
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class that owns land and the vast majority that does not. This indicates
that poverty and landlessness are directly related to each other in rural
Pakistan.
As for spatial distribution of landlessness, 86 percent of households were
landless in Sindh (landless plus non-agriculture), followed by 78 percent
in Balochistan and 74 percent in Punjab. Evidence of income disparity in
Pakistani society is bolstered by statistics, with the Lorenz curve of 2001
02 for Pakistan lying below the 198485 levels.11, 12 This indicates that
income distribution patterns gradually worsened, resulting in higher
income inequality in 200102 relative to 198485.13 Greater changes are
visible in the higher part of the income distribution curves than in the
middle and lower part of income brackets. This stipulates that in 2001
02, the upper income brackets registered a gain in income share to the
richest 20 percent at the expense of the poorest 20 percent and middle 60
percent, which obviously increased the poverty levels in the lower and
middle brackets. This projection also points out the dismal fact that the
richest one percent who used to get 10 percent of total income in 1984
85, would be getting almost 20 percent of the total income in Pakistan in
200102. All of this has tended to create a class divide between have and
have-nots in Pakistan, and has ushered in a feeling of lack of social justice
in the society, which has facilitated the indoctrination for Talibanization.
The unemployment rate for the age group fifteen to twenty-five years in
Waziristan is above 80 percent, and could be a significant contributor of
militancy in the tribal areas of Pakistan. With such abysmal statistics, it is
not a stretch to imagine that unemployed youths may be attracted to militancy as a way of venting their grievances. The inherent structural imbalances in distributive social justice in Federally Administered Tribal Areas
(FATA) in Pakistan have left gaping wounds, which the extremists are
quick to exploit. The NWFP, and FATA in particular, have tended to feel
left out of Pakistani development processes. A World Bank report on the
NWFP clearly documented widespread poverty, a provincial GDP which
was only 60 percent of the national GDP, and achievement in the education and health sectors well below the national average.14 It had the highest infant mortality rate in Pakistan of fifty-six deaths per 1000 live births.
Only 58 percent of total households received clean drinking water. The
NWFP does not get its fair share even in the judicially determined shares
of the governmental gross net profits.15 The FATA areas fare even worse.
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Islamist Trusts
In order to facilitate money transfers from donors, many businesses and
banks are used as "fronts," enabling militant organizations to receive
money in the name of income transfers. In the mid-1990s, the Central
Intelligence Agency (CIA) estimated that fifty Islamic charities "support
terrorist groups or employ individuals who are suspected of having terrorist connections."25 The militant organizations are extremely careful about
their financial matters; in its famous military manual, Declaration of
Jihad against the Country's Tyrants, al-Qaida instructs its cadres about
handling money; the same principles have ostensibly been used by militant organizations in Pakistan, including the Taliban.
"The group follows five financial security principles: funds should
be divided between those invested for financial return and the
balanceoperational fundsthat should be saved and spent only
on operations; operational funds should not all be put in one
place; only a few of the organization's members should know the
location of its funds; while carrying large amounts of money precautions should be taken; and money should be left with nonmembers and spent only when needed."26
Militant organizations in Pakistan have tended to depend heavily on the
hawala informal banking system, whereby funds are transferred on a personal guarantee of the sender, bypassing governmental scrutiny or
accountability. Pakistani bankers have estimated that the hawala system
accounted for $2.5 to $3 billion entering the country each year until 2002,
compared to only $1 billion via the formal banking system. For instance,
in Pakistan alone there were over 1,000 hawaladars or informal money
transferors in 2002, some dealing in amounts as large as $10 million.27
Even though the hawala system has decreased in importance in the wake
of the Pakistani Government's crackdown, it continues as a viable source
of income for the Taliban. This is particularly relevant in the context of
charity money raised overseas by expatriate Pakistanis, and sent home on
the personal guarantee of a hawaladar. Trust funds and charities are all
important in this context.
Pakistan does not have laws in place which suffice as anti-terror financing
legislation; the closest laws are the Anti-Money Laundering Ordinance
2007, promulgated by the former President of Pakistan, Pervez Mushar7
raf. This law is inadequate since it does not cover terrorism financing,
though it does have provisions for a Financial Monitoring Unit (FMU) to
be established within the State Bank. This is largely a placebo, since the
FMU has not actively started functioning as of Spring 2010. Terrorist
money laundering is recognized as a non-cognizable offence, which
means that the police are not allowed to launch a case or carry out arrests
of their own accord. All these legal lacunae have only added to the difficulties in tracing money flows generated and channeled by the militant organizations, including the Taliban.
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much lower quantities of opium. On the other hand, opium transit is certainly big Pakistani Taliban business; some estimates claim that about 90
percent of Afghan opium passes through North and South Waziristan and
Bajaur Agency.36 A military officer posted in the counterinsurgency operation told me in an interview: "(It) seems that these areas have become
the charas (a colloquial name for hashish, loosely applied to other narcotics) silk route(probably) the Taliban are controlling this lucrative trade
through the help of their counterparts across the border(it is hard) to
estimate the amount(perhaps) millions of dollars worth (of produce)."
Natural Resources
The Taliban had a lot of opportunity to boost their funds with the sale of
marble, after taking over the Ziarat marble quarry in Mohmand Agency in
FATA in April 2008; FATA is a major producer of marble, with around a
million tons of marble being mined every year. A substantial amount of
government input had been projected to increase marble and granite
exports to $500 million dollars by 2013; this lucrative mining business
was taken over almost completely by the militants in Mohmand Agency.37
The Taliban next took control of the lucrative government-controlled
emerald mines in Mingora, Swat. Reportedly, these mines had been occupied by the militants during the Sufi Muhammad brokered peace deal.
The nearby Shamozai and Gujjar Killi mines were also occupied, and a
lucrative militant-controlled gem trade ensued, with reportedly a third of
the profits being shared by the Taliban with the local populace. The lucrative timber trade in the Swat and Dir areas was also taken over by the Taliban. It is hard to calculate exactly how much the Taliban is gaining from
the timber trade, but it is estimated that the Government of Pakistan is
losing 65 billion rupees (nearly $1 billion) annually from the illegal timber
trade, and the Taliban seems to be the primary beneficiary.
Conclusion
It is challenging and unnecessary to point to any one factor as causal in
the allure of Talibanization in Pakistan; rather, the Taliban has shrewdly
exploited the grievances of rural, impoverished populations suffering
from social injustice and unequal land distribution. Furthermore, the Taliban has ingeniously generated income through organized crime, taxes,
and classic money-laundering schemes, while simultaneously providing
short-term "peace" and stability from local "criminal" entities.
10
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11
process of curbing terrorist financing. All these facets have to be recognized in the context of an overarching strategy, such as the NACTES currently under deliberation by the Government of Pakistan.
References
1 "Rural Poverty in Pakistan," Rural Poverty Portal, International Fund for Agricultural Development (IFAD), available at:
http://www.ruralpovertyportal.org/web/guest/country/home/tags/pakistan.
2 T. Anwar, S. K. Qureshi, and H. Ali, "Landlessness and Rural Poverty in Pakistan,"
The Pakistan Development Review, 43:4 (Winter 2004).
3 Ibid.
4 Ibid. See also: S. Malik, "Determinants of Rural Poverty in Pakistan: A Micro
Study," The Pakistan Development Review 35, No.2 (Summer 1996). Another
instructive treatise is R. Amjad, "Solving Pakistan's Poverty Puzzle: Whom Should
We Believe? What Should We Do?" The Pakistan Development Review 42, No. 4
(Winter 2003).
5 A. Panagariya, "India: The Emerging Giant," Oxford University Press, 2008.
6 Malik, 1996 and Amjad 2003.
7 Panagariya, 2008.
8 Anwar, Qureshi, 2004.
9 Ibid.
10 The Gini Coefficient is a measure of statistical dispersion, commonly used as a
measure of inequality of income distribution or inequality of wealth distribution. It
is defined as a ratio with values between 0 and 1: A low Gini Coefficient indicates
more equal income or wealth distribution, while a high Gini Coefficient indicates
more unequal distribution; 0 corresponds to perfect equality (everyone having
exactly the same income) and 1 corresponds to perfect inequality (where one person has all the income, while everyone else has zero income).
12
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13
34 Afghanistan Opium Survey, United Nations Office on Drugs and Crime (2007),
available at: http://www.unodc.org/pdf/research/AFG07_ExSum_web.pdf.
35 Ibid.
36 Zahir Shah, "Hostage to Jihad," Herald, October 2008.
37 "Funding Terror," The News (Pakistan), May 11, 2009, available at:
http://www.thenews.com.pk/daily_detail.asp?id=176843.
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